Suppliers: Focus draws business

LIVONIA, MICH. (Dec. 11, 12 p.m. ET) — Everyone in the auto industry agrees that there are some major changes on the way, as automakers work to build cars that will meet future fuel economy standards.

The issue for suppliers will be to find the best way to position their business to be in the right place to move with those changes and be among the companies that will help lead improvements.

More than 70 percent of new ideas coming into the industry come from the supplier base, said Kim Korth, president and owner of consulting group IRN Inc. of Grand Rapids, Mich., during a keynote presentation at Plastics News’ Plastics in Lightweight Vehicles conference, Nov. 6-7 in Livonia.

Check out a video interview with Tata Techonology executives at the Plastics in Lightweight Vehicles conference.

There will be great opportunities for companies as the North American industry works to meet a new federal Corporate Average Fuel Economy requirement of 54.5 miles per gallon by 2025. Those firms must pick their targets carefully, develop connections and be pragmatic.

“You need to really understand the value of putting your focus on an area where there is a realistic opportunity of success,” Korth said.

The long product-development process within the auto industry means that 2025 will be here soon — within three design cycles, she said, and that puts extra emphasis on the need for good ideas.

Forecasters with LMC Automotive US Inc. expect that meeting future fuel standards will add $2,000 to the cost of building the average car, said Michael Omotoso, senior manager global powertrain for LMC, based in Troy, Mich.

No one should expect that average car to change much in terms of looks or engines, however. Gasoline internal combustion engines will be the standard for the next 10-15 years, he said. In the U.S., cars and trucks will likely continue to split the market, with 55 percent of the vehicles on the road to be cars and 45 percent trucks for the next 10 years, Korth said.

The one growing segment will be crossover vehicles, which Korth said analysts expect will grow from 2 million sales today to 4.5 million by 2017.

But up close, there are opportunities from changes within the cars.

“Take a look at the geographic landscape in powertrain,” Korth said.

Engine efficiency will be a key area, with carmakers looking to get more performance out of engines and reduce weight. Direct-injection technology can replace eight-cylinder engines with smaller six-cylinder engines, for one example of more efficient engines, along with “start/stop” technology, which turns off an engine when it would otherwise be idling at a stoplight, or while stuck in traffic, then immediately turns it on again once the gas pedal is pressed, Omotoso said.

Those improvements in the engine will lead to a need for new parts, and new opportunities for companies that can make those parts. The EcoBoost option on some Ford Motor Co. vehicles, such as the F-150 truck, uses plastics in the cam cover, ducts, hoses and other components for an example already on the road.

Many of the traditional powertrain suppliers are companies that have focused on metal production, which means it is likely they will be looking for plastics specialists they can team with on future parts developments.

There will also be opportunities in pure weight savings.

“We’re in an era of significantly new material options and solutions,” Korth said.

A recent survey by the Society of Automotive Engineers noted that 72 percent of those engineers believe the focus for future development will be on lightweight structural materials, Korth said. That means more opportunities for composites, but also competition from aluminum, magnesium and other lightweight metals.

The newest version of the Range Rover sport utility vehicle, for instance, is 600 pounds lighter — mostly because of its use of aluminum, Omotoso said. Carbon-fiber makers also are gearing up for increased production on higher-volume vehicles, with expected announcements pending within months about future manufacturing plans.

Any effort to get into a new product area or connect with a new customer will take time and effort, but there are multiple avenues even for small suppliers.

There are 13 significant global automakers who will be looking for technology in the coming years, Korth said. Smaller automakers may be easier to reach out to, but other suppliers and researchers also could be good partners.

“Don’t start by going to purchasing,” she said. “Look for opportunities to participate in technology days or in SAE discussions.”

Being a part of a team creating complete systems can also offer carmakers more opportunities to reduce weight and save overall costs, said Gregg Peterson, senior technology specialist with Lotus Engineering. An interior system that integrates heating and air conditioning ducts saves more weight and more money in a Lotus study than an independent center console and duct work.

“You need to reach a tipping point in lightweighting, which requires a complete system approach,” he said.

It is also essential that any new programs — especially those using new materials or using plastics into places where they have not been traditionally — be developed carefully and brought on line cleanly. “When you’re doing something new and you have no [negative] baggage, it’s hard to get through,” Korth said. “When there’s bad baggage, it brings even more issues.”

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